During 2013 there was a diverse mix of active buyers in the farmland market, but while their motives for acquisition were varied, for most the land choice and location were similar. This led to high sale prices for prime arable land in the East, but weaker or zero growth for either predominantly livestock farms or those with a high proportion of the guide price tied up in the residential element.

Although the amount of farmland publicly marketed across Great Britain rose during 2013, the area marketed since 2003 has largely remained static and is significantly less than in the years prior to the millennium.

Prospects for further growth in farmland values remain positive but land quality and location are becoming increasingly critical. We discuss the key drivers and identify potential risks which could threaten the current equilibrium.

It is useful to set the UK farmland market in the context of the global farmland markets (see Graph 1).

Across the world farmland values continue to grow. Our Global Farmland Index shows an average global annualised growth since 2002 of just over 20%, while the UK equals 13%. This growth was fairly steady year-on-year apart from during 2009-10, when the rates of growth in some of the mature markets weakened.

The highest growth rates were recorded in the emerging markets of Romania, Hungary, Poland, Zambia, Mozambique and Brazil, a trend we expect to continue.

For the mature markets growth has remained healthy (from over 7% to as much as 20%), especially when compared with alternative property assets

Taken from
Market Survey: UK Agricultural Land 2014